THE SECOND ISSUE - "ON THE GROUND THAT"
60 My finding on the first issue makes it strictly unnecessary for me to deal with the second issue. That issue was, however, fully argued and I will, therefore, say something shortly about it.
61 McConnell Dowell could only have been held to contravene s 45(1) of the Act if the applicant established that the discrimination against HLS occurred "on the ground that" HLS's building employees were not covered by a particular kind of industrial instrument.
62 McConnell Dowell contended that the decision requiring Hanlons to cease construction work at the quay was motivated by, and only by, lawful reasons. It wished to avoid any disruption to work on the project. Such disruption would occur if protected industrial action was taken against HLS or Hanlons should a union attempt to secure an industrial agreement or agreements with them.
63 In final submissions McConnell Dowell sought to draw a distinction between what it described as the "mere fact" that Hanlons did not have a current industrial agreement with any union and what it said was the "true reason" for its action. That true reason was said to be the giving effect to its policy or practice of requiring sub-contractors to have a current industrial agreement. The purpose of the policy, in turn, was to protect McConnell Dowell from the business risk associated with exposure to the effects of protected industrial action and the possible loss of government work because of its failure to comply with code requirements.
64 There was substantial agreement between the parties as to the construction of s 45(1) and the legal principles which should govern its application.
65 The phrase "on the ground that" requires that an applicant establish that the proscribed reason which the applicant seeks to attribute to the respondent was a "substantial and operative reason" for it taking prejudicial action. The reason need not, however, be the sole or predominant reason why the respondent acted: see General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 616; Wood v City of Melbourne Corporation (1979) 26 ALR 430 at 434; Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at 68-9.
66 Where, as is presently the case, the respondent is a corporation the relevant ground or grounds will be those which actuated the decision-maker who acted on behalf of the corporation: see Bowling at 612; Seymour v Saint-Gobain Abrasives Pty Ltd (2006) 161 IR 9 at 14.
67 Ultimately, the inquiry is directed to identifying the "true" or "real" reason or reasons for the taking of the prejudicial action: see Bowling at 617; Barclay v Board of Bendigo Regional Institute of Technical and Further Education (2011) 191 FCR 212 at 220-1 (per Gray and Bromberg JJ).
68 In cases in which the evidence suggests that there may be more than one substantial and operative reason for the respondent's action issues may arise as to whether one reason was the more immediate cause of the impugned conduct than was another or others. Issues of characterisation and judgment may also be involved: see Geraldton Port Authority at 83-4.
69 One such case, on which McConnell Dowell placed particular reliance, was Wood. The council had stood down and then dismissed one of its employees. The employee had been a union member and joined other members on strike. The strike became protracted. The employee resigned from his union and returned to work. His union and other unions placed black bans on areas where the employee worked. The result was that garbage was not collected. This, in turn, gave rise to a risk to public health. Section 5(1)(aa) of the Conciliation and Arbitration Act 1904 (Cth) made it an offence for an employer to dismiss an employee "by reason of the circumstance that the employee … has refused or failed to join in industrial action …" The council was charged with offences under s 5(1)(aa). Smithers J dismissed the charges. In doing so he examined the motivation of the council officers who were responsible for the decision to dismiss the employee. His Honour said (at 447-8) that:
"The section does not make it an offence to dismiss an employee who has broken or attempted to break a strike, or defied his fellow employees, or a union decision to engage in a strike or other industrial action. An offence is only committed when the state of mind of the employer is such that the fact that the employee has refused or failed to join in the strike was itself a substantial and operative reason for dismissing or otherwise injuring the employee. It would be apparent that in the case of an employer whose state of mind was that the fact that the employee had resisted the strike disposed him rather to advantage the employee in his employment, but who nevertheless, in his own interests, was influenced by or indeed forced to dismiss him by circumstances created by other persons. He would not act by reason of the circumstance that the employee was a strike-breaker. Similarly no offence is committed by any employer where that latter circumstance is not a substantial and operative factor influencing him to dismiss the employee."
70 The distinction, drawn in Wood, between the relative immediacy of reasons for impugned conduct has been drawn in many cases. It is not necessary to review them all because that exercise was undertaken by Finkelstein J in Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union (2001) 112 FCR 232 at 282-287. This review led his Honour to conclude (at 287) that:
"Thus, there has been an unbroken line of State and federal authority in favour of the proposition that, for the purpose of deciding whether there has been an unlawful dismissal for the reason that an employee is entitled to the benefit of an award or certified agreement, it is necessary to draw a distinction between the 'reason' or motive behind the dismissal and what produced that motive." (Emphasis added).
71 In applying these principles his Honour said (at 289) that:
"At this point, it is sufficient to note that the trial judge may not have drawn a sufficient distinction between the immediate reason (motive or purpose) for the dismissals or the acceptance of the tender, and the proximate reason (cause) which explained why that action was undertaken …"
72 The distinction was not one which trial judges always found easy to draw. In Maritime Union of Australia v CSL Australia Pty Ltd (2002) 113 IR 326 at 342, Branson J, for example, observed that the "distinction may in many cases be easier to articulate than to draw, especially in respect of a statutory provision that recognises the possibility of a number of reasons having a causal connection with conduct …".
73 More recently, the authority of this line of cases (which includes Wood) has been called into question by the decision of the High Court in Purvis v The State of New South Wales (2003) 217 CLR 92. The Court there dealt with the construction of s 5(1) of the Disability Discrimination Act 1992 (Cth). This sub-section provided that "a person discriminates against another person on the ground of a disability of the aggrieved person if, because of the disability" the actor did certain things. In their joint judgment Gummow, Hayne and Heydon JJ made certain observations about the issue of whether the appellant had been treated less favourably "because of" his disability. Their Honours said (at 163) that:
"The arguments about this aspect of s 5(1) sought to draw distinctions between the motive of the discriminator, the purpose of the conduct and the effect of the conduct, and between objective and subjective criteria of operation. Attention was directed to the drafter's use of the expression 'by reason of' in the equivalent provisions of the Sex Discrimination Act … rather than the expression 'because of' used in s 5(1) and other provisions of the Act … Reference was made to s 10 of the Act and its provision that if an act is done for two or more reasons and one of those is the disability of a person 'whether or not it is the dominant or substantial reason for doing the act' then for the purposes of the Act 'the act is taken to be done for that reason'.
…
For present purposes, it is enough to say that we doubt that distinctions between motive, purpose or effect will greatly assist the resolution of any problem about whether treatment occurred or was proposed 'because of' disability. Rather, the central question will always be - why was the aggrieved person treated as he or she was? If the aggrieved person was treated less favourably was it 'because of', 'by reason of', that person's disability? Motive, purpose, effect may all bear on that question. But it would be a mistake to treat those words as substitutes for the statutory expression 'because of'. (Emphasis in original).
74 Similar reservations were expressed by Gray and Bromberg JJ in Barclay where their Honours said (at 221-2) that:
"The reason must be an operative or immediate reason and need not be the sole or dominant reason … But the drawing of distinctions between proximate or immediate reasons for conduct … or between the cause of conduct and the reason for conduct … is not helpful. Those distinctions fail to give sufficient attention to whether or not the reason was operative, and they also draw distinctions between a reason and a factor in a reason. As Gray J (with whom Woodward and Jenkinson JJ agreed) said in Lewis Construction Company Pty Ltd v Martin (1986) 17 IR 122 at 125:
the Act and the authorities do not distinguish between a 'reason' and a 'factor'; indeed, in Bowling, these terms are used interchangeably.
Further, that no distinction is to be drawn between the cause of conduct and the reason for conduct is supported by our earlier conclusion … as to the meaning of 'because' and the interchangeable use by the relevant provisions … of cause and reason."
75 The task of the Court is, then, to determine why McConnell Dowell took the adverse action against HLS. Was the fact that HLS' employees were not covered by an industrial agreement a substantial and operative reason for Mr Kapetanas' decision?
76 Mr Kapetanas' reason or reasons for requiring the removal of HLS' employees from the site are to be characterised having regard to his own evidence and the circumstances in which he acted.
77 Mr Kapetanas claimed that he was influenced, in making the decision that HLS workers should be removed from the project site, by health and safety concerns. He complained about the lack of screening of the welding work and about debris created by the fabrication process polluting the adjacent waters. These concerns did not seem to have loomed very large in his impugned decision. He did not personally intervene to require improvement to safety standards or to prevent further pollution. Nor did he require Mr Stein or anyone else employed by McConnell Dowell to take such steps. His correspondence with Mr Stein did not touch on these issues.
78 What Mr Kapetanas was principally concerned about was the fact that neither Hanlons nor HLS was a party to an industrial agreement with a union covering the work being performed by the HLS employees. This was the issue he raised with Mr Kelly. Mr Kelly's advice included a draft of a letter which Mr Kapetanas directed Mr Stein to send to Hanlons. The letter assigned two reasons to the requirement that staff be withdrawn. The first was that Hanlons did "not possess any current industrial instrument which covers your workforce". The second was that the contractual arrangement between Hanlons and McConnell Dowell did not provide for fabrication work to be carried out on site.
79 Mr Kapetanas was apprehensive that a union might take protected industrial action against Hanlons in order to secure an industrial agreement and that this may disrupt work on site. In order to obviate the attendant commercial risk he gave effect to McConnell Dowell's policy that all sub-contractors should have what he regarded as an appropriate industrial agreement. He also understood (rightly or wrongly) that the Commonwealth Government's Code of Conduct required McConnell Dowell to ensure that all its sub-contractors had such agreements. A failure to satisfy this requirement (he thought) jeopardised McConnell Dowell's ability to obtain government contracts.
80 I am satisfied, on the balance of probabilities, that an operative and immediate reason for McConnell Dowell's decision to require that the HLS employees be withdrawn from the construction site was the fact that HLS did not have an industrial agreement with a union. This was one of two reasons which appeared in the letter which Mr Kapetanas directed Mr Stein to send to Hanlons on 12 May 2009. The work on one of the bays remained incomplete. Another sub-contractor (whose employees were, presumably, covered by an acceptable industrial agreement) was engaged to complete the assembly work on that bay. At the time the decision was made neither Hanlons nor HLS was under threat of industrial action. No protected or other industrial action was being taken against them. There was, therefore, no disruption or threatened disruption to the work being undertaken for McConnell Dowell. Even had such a disruption occurred it would not have had wider implications of the kind which concerned the council in Wood. The decision was therefore pre-emptive rather than reactive: the decision was not forced on McConnell Dowell by circumstances created by any third party. Mr Kapetanas' evidence satisfies me that he was not prepared, under any circumstances, to permit work to be undertaken on a McConnell Dowell site, over which he had control, by employees whose employment was not regulated by an industrial agreement between their employer and a relevant union.
81 Mr Kapetanas' decision was properly to be characterised as being taken on the ground that Hanlons and HLS did not have an industrial agreement covering the work being undertaken by the HLS employees at the construction site.
82 It may well be that there were other substantial and operative reasons which motivated Mr Kapetanas. These may have included the protection of McConnell Dowell's commercial interests. It is not necessary that I make any findings about the presence or absence of any such additional reasons. Their existence would not disturb my principal finding that the impugned reason, relied on by the applicant, was an operative and immediate reason for McConnell Dowell's action.